Harnessing trade and environmental policies to accelerate the green transition

This paper examines how trade and environmental policies can complement each other in addressing the current triple planetary crisis of climate change, biodiversity loss, and pollution. With political commitments to strengthen the synergies between environmental and trade policies being voiced in various policy fora, there is momentum to align trade with environmental goals. The paper highlights synergies, such as promoting trade in environmental goods and services, securing access to critical raw materials for the energy transition, supporting circular supply chains, and creating more sustainable food systems through trade. However, challenges include an increasingly complex regulatory landscape with the proliferation of trade-related environmental policies (TrEPs), spillover effects due to differences in the ambition of environmental policies across countries, and market-distorting and unco-ordinated government support, which may marginalise low-income countries and hinder fair competition. Enhanced international co-operation – via multilateral dialogue, data transparency, capacity building, and leveraging global frameworks – can address these challenges, ensuring that trade and environmental policies are mutually supportive.